If you do not have an office in another location, you can write off a portion of your home expenses. We will require the total square footage of your home and the square footage used for business purposes.

Heat

Electricity

Insurance

Maintenance

Mortgage interest (can be obtained from your bank)

Property taxes

Capital cost items:

These are items such as furniture and computers purchased to run your business; only a percentage of captial cost allowance is used each year as an expense to your company.

Vehicle Expenses:

If you are a limited or incorporated company and you drive your personal vehicle for business purposes, keep a log of all kilometers driven for business and a calculation can be done monthly or yearly to recapture the amount as an expense. Currently the Government allows .53 cents for the first 5000 kilometers and .47 cents for every kilometer after that; however, if you use your vehicle solely for business purposes (you have another vehicle for personal use), you are able to write the entire vehicle off.

Our staff includes trained, professional bookkeepers with over two decades of unparelleled experience in both the private and public sector. We at ALL-PRO are dedicated to producing high quality work for our clients. We have worked with a wide variety of different business, not only helping with their bookkeeping but also in training in-house staff as well as consulting.

For sales Under $30, there are 3 pieces of information:
– The name of the business
– The invoice date
– The total amount paid

For sales Between $30 and $149.99, include the above 3 points, plus:
– The total amount of HST/GST charged on the sale
– If the sale has items taxed at different rates, you must show the break-down of the amount of tax at each rate
– The business number of the business issuing the invoice

For sales Over $150, all points above must be included, plus:
– A brief description of the goods or services
– Terms of payment

Lately I have had some clients ask me what the meanings of certain accounting terms are. I have compiled a few answers to common questions below…

What is an asset?

Just like in ordinary language, an asset is something you own that adds value to your business. Fixed assets are things you wouldn’t normally sell, like buildings or equipment. Current assets include cash, accounts receivable and things you normally use up or sell.

What are Accounts Receivable?

This is a list where you keep track of which customers owe you money, how much they owe, and how long since you earned the income. This is one of the most important assets of your business. It must be monitored regularly, to make sure you collect on what are really interest-free loans to your customers.

What are Accounts Payable?

This is where you keep track of which suppliers you owe money to, how much you owe, and when they must be paid. This is one of the most important liabilities of your business. It must be monitored regularly also, with regard to being able to pay on time.

What is a Balance Sheet?

The top of your balance sheet shows you the assets owned by your business. The lower portion shows (in broad terms) where the money came from to buy those assets: either from you (equity); or borrowed (liabilities). One reason it is called a balance sheet, is because the total value of the assets always equals the total of equity and liabilities.

What is a Business Plan?

A business plan is a report that summarizes the research and planning you have done in order to answer this question: will you be able to sell your products and/or services, and make a living at it? Going through the process of preparing a business plan will make you face the hard questions every successful business deals with. They aren’t easy to do, but they are worth it. Existing businesses can benefit from a solid business plan, but an inexperienced manager of a new business really needs one.

There are many free internet resources to help you prepare a business plan, usually taking the form of questions that you answer one at a time. These questions include describing your cash flow requirements and your marketing strategy.

What is Double-Entry Bookkeeping?

Unlike using a cheque-book to keep track of a single bank account, double-entry bookkeeping lets you keep track of many accounts, and maps the transactions between them almost effortlessly. If you have a business with more than one bank account, including a credit card or line of credit, double-entry bookkeeping is more efficient.

What is cash flow?

Cash flow is the day to day ebb and flow of money in and out of your business. Even if orders are coming in fast, you may find you are short of cash to pay your bills. Up-to-date invoicing, and collecting on those invoices, are critical for a healthy cash flow.

What is a Cash Flow Projection?

A cash flow projection, or cashflow analysis, is extremely useful on its own, or as part of a business plan. It is generally prepared using spreadsheet software. It will have columns of monthly (or weekly) estimates of income, investment and expense amounts, the more detailed the better. For example, if you know you will have to pay $2,000 in rent each month, there will be a row just for rent. It will also include large one-time costs, such as equipment purchases. The benefit of a cash flow projection is that it shows you when you will be short of cash, and gives you time to prepare. Even poor estimates are much better than none, and they can be improved as time goes by. One of the most common ways growing businesses run short of cash unexpectedly, is when they are waiting for previous customers to pay up while materials must be purchased for new orders.

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Goods and services tax (GST 5%) is a tax that applies on most supplies of goods and services made in Canada. Examples of goods and services for which GST is not charged and collected include:

• Used residential housing

• Long-term residential accommodation

• Most health, medical, and dental services

• Child-care services

• Most domestic ferry services

• Legal aid services

• Many educational services or tutoring services

• Music lessons

• Most services provided by financial institutions

• Insurance policies

• Most goods and services provided by charities

Certain goods and services provided by non-profit organizations, governments, and other public service bodies.

Companies which provide taxable supplies in Canada, and have total revenues from taxable supplies of $30,000 or more in the last four consecutive calendar quarters must register for GST. When registering for GST, the reporting period should be the same as your fiscal year for income tax purposes. Input Tax Credits (ITC’s) can be claimed on the GST return to recover GST paid or owed on purchases and expenses for the business. When completing the GST return, deduct the total Input tax credits (ITC’s) for the reporting period from the GST collected and the result would be the net GST Refund (or payable ).

For companies with $500,000 or less in annual taxable revenues, there is an option to either have a quarterly reporting period or an annual reporting period. If your reporting period is monthly or quarterly, the filing and remittance deadline is one month after the end of the reporting period. If your reporting period is annual, the filing and remittance deadline is usually three months after the end of the reporting period.

For annual filers, if your net tax for the current or previous quarter is less than $3000, then paying quarterly installments is not necessary. For those who need to make installment payments, the deadline is one month after your fiscal quarter end date.

Effective July 1, 2010, GST 5% is replaced by Harmonized Sales Tax (HST) 12% in the province of British Columbia and HST 13% in the province of Ontario.

While setting up a corporation may seem like a good idea if you’re self-employed, it can have serious tax consequences in certain instances. If Canada Revenue Agency determines that you are, effectively, an “incorporated employee”, it may disallow a number of business expenses as well as the small business deduction which normally applies to the first $500,000 of active business income that a corporation generates. This can result in the corporation’s income being taxed at the highest corporate rate.

Some of the criteria that distinguish a corporation set up by a truly independent contractor versus a personal service corporation (PSC) include whether the corporation has only a single client or very few clients, whether the client provides work space or equipment and how much control the client has over when and where the contractor provides his or her services. Canada Revenue Agency’s interpretation of the Income Tax Act with regards to “incorporated employees” is that, without the existence of the corporation, the person performing the services on behalf of the client company would reasonably be regarded as an officer or employee of that company.

Those who are required to work on-site for their client, on a schedule determined by the client and who are provided with work space and equipment would most definitely be considered to be operating a personal service business by CRA.

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Personal tax returns are due to be filed by April 30th every year, we all know that, right? What you may not know is that, if you have self-employment income during the tax year (if you run your own small business for example), you AND your spouse don’t have to file your tax returns until June 15th. Pretty awesome, right? An extra month and a half to get your taxes in!

Here’s the funny part…. you don’t have to FILE your tax returns until June 15th, but if you have a balance owing for the tax year, you still have to PAY your taxes by April 30th.

Huh?

Seriously, yup…most people I know need to have their taxes prepared before they know whether they have a refund or a balance owing. It’s not something you can just rattle off on a calculator, and if you’re going to do your taxes before April 30th, you might as well file them too!

So before you go ahead and wait until June to file your tax return, you better make darn sure that you have a refund coming. Because if you don’t, you’ll be paying interest on the balance that you owe for every day after April 30th that you don’t pay.

The moral of my story?: Why wait? The sooner you get your taxes done, the better.